German inflation has plummeted to its lowest point in 28 months, registering a less-than-anticipated 3% growth in prices. This development coincides with a contraction in output during the third quarter.
As the most robust economy in the European Union (EU), Germany has witnessed a deceleration in its rate of price increase, signaling a potential downturn in economic activities. Over the last few years, inflation in Germany had been on an upward trajectory, peaking at 2.9% in the month of October.
This tapering off in the rate of price increase is not isolated to Germany but is part of a larger European trend. In the month of October, the eurozone saw its inflation rate plunge to a mere 0.7%, marking the lowest in almost four years.
The European Central Bank (ECB) has been laboring to reach an inflation rate slightly below 2% for the eurozone. Given the current rates falling significantly beneath this goal, the ECB might have to contemplate additional economic stimuli.
Germany’s declining inflation rate and the third-quarter output contraction serve as markers of the economic challenges the nation is grappling with. Germany narrowly sidestepped a recession in the third quarter, as its Gross Domestic Product (GDP) remained unchanged when compared to the preceding quarter.